Small Business

Making Welfare-to-Work Work

April 18, 2001

What would it take to implement a successful welfare-to-work program at your company? The key to making these programs successful, particularly at smaller businesses, is providing essential support services to former welfare recipients. And that's something best done as a partnership between the private and public sectors, according to a recently released policy paper from the Research Institute for Small & Emerging Business Inc., a think tank in Washington, D.C.

The study notes that small companies that are committed to hiring former welfare recipients have learned to "make allowances" for these workers in transition. Successful employers typically "go out of their way" to help them deal not only with logistical barriers, such as transportation and child care, but also with their real need for on-the-job training and mentoring, the report says.

The requirements for hiring and integrating such workers into the workplace is only going to increase, the report suggests, because the "best-qualified people already have been hired."

NEED TO "REACH OUT." Companies that have hired former welfare recipients say what drives them to participate in these state-sponsored programs isn't direct subsidies, but the need to find good employees. Small companies that used former welfare recipients were experiencing growth: In the survey, 33% had seen revenue growth of 10% or more during that time period, and 70% had added between one and five positions.

The working paper, which pulls together original survey material and research from other sources, was produced for the Washington policy group by Catherine Heimovics at the University of Missouri-Kansas City's Henry W. Bloch School of Business & Public Administration. The report recommends that, among other things, small-business associations "reach out to transit authorities, community agencies, state welfare agencies, and elected officials to lobby for transportation alternatives and become partners in creating workable solutions."

So far, small-business participation in welfare-to-work programs hasn't been too impressive, the report notes. These companies tend to have fewer resources to set up their own job-training programs and deal with paperwork. They also typically lack the ability to organize transportation and child-care services. The Welfare-to-Work Partnership, which acts as an intermediary between the private and public sectors to place former welfare recipients in jobs, says their small-company members haven't moved as quickly in setting up programs as bigger businesses have.

The 12,000-member, nonprofit organization reports that 30% of their small-company members have yet to hire their first former welfare recipient, compared to 10% of the large-company members. Another recent survey, by the Florida State Wages board and the National Federation of Independent Business, found that while employers say they believe in hiring former welfare recipients, only 25% have actually done so. By Robin Schatz in New York